Bajaj-Allianz Breakup: 100% Ownership of Bajaj Group, New Growth Era!

Understanding the Bajaj Share Price Impact After Allianz Exit

The recent news about the Bajaj Group's intention to acquire Allianz's 26% stake in their Insurance Sectoral Joint Venture is a big deal for investors keeping an eye on the Bajaj share price. This daring move signals the conclusion of a 23-year partnership that began back in 2001. It positions the Bajaj Group for complete ownership and could significantly influence the Bajaj Allianz share price in the coming months.

Historical Context: Bajaj-Allianz Partnership

The Bajaj Group and Allianz have operated under a joint venture agreement since 2001. This agreement included a call option clause allowing Allianz to purchase additional shares at a predetermined price when India raised its Foreign Direct Investment (FDI) limit for the insurance sector. Even with the rise in the FDI cap, this acquisition route encountered some resistance from Bajaj and the Insurance Regulatory and Development Authority of India (IRDAI). They pushed for a fair market valuation rather than a set price.

Valuation and Acquisition Details

The deal values Bajaj Allianz Life Insurance at around Rs 37,000 crore, while Bajaj Allianz General Insurance is valued at Rs 65,000 crore. This highlights the impressive growth these companies have seen through their joint venture.

Here are the details of the acquisition:

• Bajaj Finserv Ltd. will acquire 11,13,295 equity shares (valued at Rs 10 each) in Bajaj Allianz General Insurance Company (BAGIC) for Rs 4,808.24 per share.
• Additionally, Bajaj Finserv Ltd. will purchase 15,22,161 equity shares (also at Rs 10 each) in Bajaj Allianz Life Insurance Company (BALIC) for Rs 2,654.12 per share.
• Both companies will get a 1.01% stake each after the Acquisition.

Restructuring and Ownership Changes Affecting Bajaj Share Price

The Acquisition involves a complex restructuring where:

1. Bajaj Finserv will hold a 75.01% stake in both insurance ventures.
2. Bajaj Holdings and Investment Ltd. will acquire approximately 19.95% of paid-up equity capital.
3. Jamnalal Sons Pvt. Ltd. will acquire approximately 5.04% of the paid-up equity capital.

This restructuring effectively increases the Bajaj Group's ownership from 74% to 100% in BAGIC and BALIC, consolidating their control over these valuable insurance assets.

Regulatory Approvals and Future Outlook

The stake acquisition remains subject to regulatory approvals from key authorities:

• The Competition Commission of India (CCI)
• Insurance Regulatory and Development Authority of India (IRDAI)

Given the strong growth trajectory of India's insurance sector, this acquisition is expected to impact the Bajaj Group positively. It also paves the way for a potential listing of these two insurance companies, with an IPO soon possible.